Income Tax Appellate Tribunal - Amritsar
Guru Teg Bahadur Educational Trust, ... vs Commissioner Of Income Tax ... on 30 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND
SH.N.K.CHOUDHRY, JUDICIAL MEMBER
I.T.A. No. 234(Asr)/2016
Assessment Year: 2014-15
Guru Teg Bahadur Vs. CIT(Exemption)
Educational Trust, Chandigarh.
Gurudwara Thara Sahib,
Village Hazara, Jalandhar.
PAN:AAATG9403B
(Appellant) (Respondent)
Appellant by: Sh. Surinder Mahajan(CA)
Respondent by: Sh. Rahul Dhawan (DR)
Date of hearing: 20.10.2016
Date of pronouncement: 30.12.2016
ORDER
PER N. K. CHOUDHRY (JM):
This is an appeal filed by the assessee against the order of ld. CIT(Exemption), Chandigarh, dated 31.03.2016 for Asst. Year:2014-15.
2. The assessee has raised the following grounds of appeal.
"(i) That the order passed by Worthy CIT(Exemptions) is against law & facts of the case.
(ii) That Worthy CIT(Exemptions) Chandigarh has wrongly declined approval under section 10(23c)(vi) to the assessee.
(iii) That the order passed is against the principles of natural justice, as sufficient opportunity has not been provided to the assessee, being date fixed for adjudication on 31.03.2016 i.e. last date for disposal of the application of the assessee."2 ITA No.234(Asr)/2016
Asst. Year: 2014-15
3. The brief facts of the case are that the assessee is an educational trust created with the object to maintain and manage Guru Teg Bahadur Public School, to open other schools, colleges and other professional/educational institutes. The assessee has filed an application in Form 56D before the ld. CIT(Exemptions) on 24.03.2015 seeking approval u/s 10(23C)(vi) of the Act. The application reveals that the trust is in ongoing entity that has been in operation since 06.08.1998. As per order dated 31.03.2016, the ld. CIT has denied exemption u/s 10(23C)(vi) of the Act due to the following reasons:
"(i) Non filing of consolidated receipts and payments accounts for the year 2012-13, 2013-14 and 2014-15. The income arising from the activities of the Trust cannot be properly appraised in the absence of consolidated receipts and payments account for the past three years.
(ii) Non filing of registered amended Trust Deed wherein the clause as to distribution of movable and immovable assets of the Trust upon its dissolution has been amended."
4. At the outset, the ld. AR has submitted that Worthy CIT(Exemptions) has wrongly declined approval under section 10(23C(iv) to the assessee and further submitted that the order passed is against the principles of natural justice, as sufficient opportunity has not been provided to the assessee, being date fixed for adjudication on 31.03.2016 i.e. last date for disposal of the application of the assessee. It was further argued by the ld. AR that the consolidated financial statement qua cash receipts, expenditure and surplus funds were filed with the ld. CIT(E), and 3 ITA No.234(Asr)/2016 Asst. Year: 2014-15 provisional balance sheet and income and Expenditure Account for the year 2014-15, Statement showing total receipts, total expenditure and net surplus for the FYs. 2006-07 to 2014-15, and Copies of consolidated balance sheet, Income and Expenditure Account for the year 2012-13, 2013,14 and 2014-15 have been filed, however, the ld. CIT(Exemption) wrongly rejected the application by mentioning that consolidated receipts and payments accounts for the 2012-13 to 2014-15 were not filed. It was further submitted that the ld. CIT(A) has completely skipped the consolidated financial statements filed by the assessee vide letters dated 27th July, 2015 and 30th March, 2016. The ld. AR further submitted that test to be applied for grant of exemption u/s 10(23C)(vi) of the Act is whether predominant nature of the activities of the trust is educational and incidentally surplus should not come in the way of grant of exemption.
With regard to the second reason for denial of exemption for non- filing of registered amendment Trust Deed. It was submitted that in view of the judgments passed by the jurisdiction High Court in the case of St. Kabir Educational Society vs. Central Board of Direct Taxes & Ors. (2014) 366 ITR 378(P&H). Order of the Ld CIT(A) is totally unjustified because the utilization of funds in the event of dissolution of the trust would be an event which yet to take place, therefore, on the aforesaid submissions and documents relied upon by assessee, the assessee is entitled to get registration.
4 ITA No.234(Asr)/2016
Asst. Year: 2014-15
5. On the contrary, it was argued by the ld. DR that the ld. CIT(Exemption) is empowered to justify himself about the genuineness of the activities and even otherwise surplus funds were available with the society which is not being utilized for educational purposes and the assessee has not complied with the show cause notice issued by the ld. CIT(Exemption) while asking specifically consolidated receipts and payments accounts for the last three years of the trust and also failed to submit registered amended memorandum accepting the change in the clause. It is also a fact that the matter was fixed for final adjudication on 31st March, 2016, however, the Assessee delivered the papers on dated 30th March, 2016 only. It was further argued as the Assessee failed to rectify the defects despite ample time was given by the ld. CIT (Exemption), therefore, the CIT(Exemption) was right in rejecting the request for grant of approval.
6. We have gone through the facts of the case and submission of the parties, as in the instant case the ld. CIT(Exemption) rejected the application of the Assessee for grant of exemption u/s 10(23C)(vi) of the Act due to the reasons , firstly non-filing of consolidated receipts and payments account for the year 2012-13 to 2014-15 and secondly on non- filing of registered amended Trust Deed . As it reflects from the documents placed on record with a certification by ld. AR of the Assessee that written submission and other documents filed before this Bench, 5 ITA No.234(Asr)/2016 Asst. Year: 2014-15 were also available with the lower authorities. Considering the said certification by the ld. AR and also it reflects from the documents that the consolidated receipts and payments account for the year 2012-13, 2013-14 and 2014-15 were available with the ld. CIT(E) , however, factually it is true that the same have been filed before the ld. CIT(Exemption) only on 30th March, 2016 and the ld. CIT(Exemption) passed an order for rejection of the exemption application of the Assessee on 31st March, 2016 itself, therefore, considering the facts, we are of the considered opinion that the ld. CIT(Exemption) may be inadvertently skipped the documents , placed by the Assessee.
With regard to the second ground for rejection of the denial of the exemption for non-filing of the registered amended trust deed with a clause for distribution of movable and immovable assets of trust upon its dissolution, we are of the considered opinion that in view of decision of St. Kabir Educational Society vs. Central Board of Direct Taxes & Ors (supra), it was a curable defect. Although it reflects from the impugned order itself that ample opportunities have been given by the ld. CIT (Exemption) to the assessee, however, the assessee failed to do so but later on got registered the same on 25th April, 2016, which is not in dispute . In our considered opinion, in the cumulative effect, we set aside the order passed by the ld. CIT(A) and remand the case to file of CIT(Exemption) to grant the exemption u/s. 12AA of the Act after considering the documents such as amended Trust Deed and 6 ITA No.234(Asr)/2016 Asst. Year: 2014-15 statement showing total receipts, total expenditure and net surplus for the Financial Years concerned.
12. In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 30.12.2016.
Sd/- Sd/-
(T. S. KAPOOR) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:30.12.2016.
/PK/ Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order